Around 20% of home owners in the UK took out an interest-only repayment mortgage during the last decade or so, with around 81,000 interest-only mortgages due to finish this year. We’ve seen an increasing number of clients coming to us for advice about managing these mortgages and repayments and finding suitable financial products to help them do so.
If you’re one of that number and don’t have a vehicle with which to pay off your loan, my advice is to seek professional advice as soon as you can. Help is at hand.
INTEREST-ONLY MORTGAGES - HELP IS AT HAND
Taking out an interest-only mortgage means that none of the capital is paid off over the term of the mortgage, with a lump sum due at the end. If your property was originally mortgaged for £500,000 you would still owe £500,000.
Property price growth is no longer the best way to plan for repayments, and many who opted for this type of mortgage may have been optimistic about appreciation in property value.
If you’re concerned about having a financial plan in place, now is the time to consider your options. Take the bull by the horns and speak with an experienced agent and a financial adviser to look at the choices available. Many lenders are offering to convert interest-only mortgages into repayment mortgages, but the rates may be higher and lending criteria has changed significantly since you last took out a mortgage.
Sound advice and prudent planning will mean you’ll be one step closer to ending your worries about your interest-only mortgage.
